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11 U.S.C. § 328Limitation on compensation of professional persons

submitted 48 years ago by Pub. L. 95-598 to r/title-11-BANKRUPTCY · 298 words · no verdicts yet

in plain englishAI-generated · not legal advice

A trustee or committee can hire a professional on any reasonable payment terms. A court can later adjust that pay if the terms turn out to be an unforeseeable bad deal. The court can also deny pay if the professional has a conflict of interest.

(a) With the court's approval, the trustee — or a committee formed under section 1102 — can hire or approve hiring a professional person under section 327 or 1103, on any reasonable terms: a retainer, hourly pay, a fixed or percentage fee, or a contingent fee. Even so, the court can later approve different pay than those original terms set, once the job is done, if the terms turn out to have been a bad idea because of something no one could have predicted when they were first set. (b) If the court let a trustee act as the estate's own attorney or accountant under section 327(d), the court can only approve pay for that lawyer/accountant work — not for the trustee's regular duties that a trustee normally handles without a lawyer or accountant's help. (c) Except as sections 327(c), 327(e), or 1107(b) allow, the court can refuse to pay or reimburse a professional hired under section 327 or 1103 if, at any point during that job, the professional stops being "disinterested" or turns out to hold or represent an interest against the estate on the matter they were hired for.
the actual law source: uscode.house.gov ↗public domain
(a)

The trustee, or a committee appointed under section 1102 of this title, with the court’s approval, may employ or authorize the employment of a professional person under section 327 or 1103 of this title, as the case may be, on any reasonable terms and conditions of employment, including on a retainer, on an hourly basis, on a fixed or percentage fee basis, or on a contingent fee basis. Notwithstanding such terms and conditions, the court may allow compensation different from the compensation provided under such terms and conditions after the conclusion of such employment, if such terms and conditions prove to have been improvident in light of developments not capable of being anticipated at the time of the fixing of such terms and conditions.

(b)

If the court has authorized a trustee to serve as an attorney or accountant for the estate under section 327(d) of this title, the court may allow compensation for the trustee’s services as such attorney or accountant only to the extent that the trustee performed services as attorney or accountant for the estate and not for performance of any of the trustee’s duties that are generally performed by a trustee without the assistance of an attorney or accountant for the estate.

(c)

Except as provided in section 327(c), 327(e), or 1107(b) of this title, the court may deny allowance of compensation for services and reimbursement of expenses of a professional person employed under section 327 or 1103 of this title if, at any time during such professional person’s employment under section 327 or 1103 of this title, such professional person is not a disinterested person, or represents or holds an interest adverse to the interest of the estate with respect to the matter on which such professional person is employed.

Source credit: (Pub. L. 95–598, Nov. 6, 1978, 92 Stat. 2563; Pub. L. 98–353, title III, § 431, July 10, 1984, 98 Stat. 370; Pub. L. 109–8, title XII, § 1206, Apr. 20, 2005, 119 Stat. 194.)

history & why it existsrecord from the source credit
  • 1978Enacted · Pub. L. 95-598 · 92 Stat. 2563
  • 1984Amended · Pub. L. 98-353 · 98 Stat. 370
  • 2005Amended · Pub. L. 109-8 · 119 Stat. 194

A history note hasn’t been published yet. The record shows enactment by Pub. L. 95-598 on 1978-11-06.

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